To what extent can the government help boost domestic industry and manufacturing? In recent weeks, several politicians have talked about their desire to help UK manufacturing and boost industrial production. It may be a noble endeavour to try and boost UK industry and rebalance the economy away from financial services to manufacturing. But, how practical …
According to Search marketing agency the Eword, Google hold 89.5% of the market share for internet search in the UK. Bing (owned by Microsoft) taks only a relatively small 6.11%. For such an important market, this is a very high market share, and shows Google has extensive monopoly power. This monopoly power has also been …
Readers Question Why did bond yields in the USA rise at news of the Fed Tapering back in August? The Federal Reserve has been engaged in a policy of quantitative easing. This involves: Creating money electronically Using this created money to buy assets, such as government bonds. The aim of quantitative easing is to stimulate economic …
Resale price Maintenance RPM used to be a common practise for manufacturers to set a minimum price for retailers to sell their goods. In the UK, the use of RPM was quite common in the post-war period from clothes to books, records, clothes and electronic goods. It ensured a minimum price of resale and avoided …
Readers question. Recent data suggests an increase in the current account deficit – is the depreciation of the UK pound ineffective or is it just a blip in exports that will resolve itself next quarter? The UK has experienced a persistent current account deficit since the mid 1980s (see: UK current account for more graphs) …
Hit and run competition occurs when a firm temporarily enters a market and then leaves when supernormal profits are exhausted. Hit and run competition is considered to be a feature of a contestable market. A contestable market has low barriers to entry and exit. Therefore, if firms in the industry are making supernormal profits, there …
A tax haven is a country where individuals and firms are able to save money on paying tax through low or zero rates of tax. Tax havens may also provide customers with the ability to hide their true identity – helping their activities to remain hidden from the government in questions Countries considered to be …
In the past few years, Central Banks have been buying bonds to Increase money supply Reduce bond yields The aim of quantitative easing is to avoid deflationary pressure and increase economic growth. Ending quantitative easing will mean The Central Bank stop buying any more bonds. The process will then be reversed and, in time, the …